Germany’s economy is facing rough waters, with bankruptcies predicted to skyrocket in 2024, hitting 20,000 by year’s end.
October alone saw a 22.9% jump in insolvencies compared to the same period last year, according to fresh data from the Federal Statistical Office.
Economist Steffen Müller from the Halle Institute for Economic Research didn’t mince words, describing the situation as a “perfect storm” caused by persistent economic stagnation and soaring costs. “The current wave of insolvencies is the result of long-term economic weakness and drastically increased costs,” Müller stated.
Adding to the alarm, Marc Evers from the German Chamber of Industry and Commerce (DIHK) highlighted the multiple pressures crushing businesses. “Falling demand from home and abroad, high costs for energy and skilled workers, considerable burdens from taxes and bureaucracy—all of this is putting pressure on business prospects and the financial situation,” Evers explained.
While last year saw 17,814 bankruptcies, projections suggest 2024 will bring roughly 20% more. Though this uptick is significant, it pales in comparison to historical peaks like the 33,000 insolvencies during the 2008 financial meltdown.
Even so, the outlook isn’t rosy. A startling 7.3% of German companies reported in an October poll by the Ifo Institute that they’re “acutely” worried about their survival. This concern runs deeper than just insolvencies, as major corporations like VW, Bosch, Ford Germany, and ZF are slashing jobs and scaling back operations within the country.
The message is clear: Germany’s economy is grappling with a series of self-inflicted wounds. High taxes, bureaucratic red tape, and sky-high energy costs are strangling businesses, while government policies fail to offer real solutions. Conservative voices are warning that this path is unsustainable, urging a shift toward policies that promote growth, cut costs, and let businesses thrive. If Berlin doesn’t act soon, this economic storm may only grow stronger.
